Self assessment isn't working

By JO THORNHILL
Updated:

 

The self assessment tax system is in an even bigger mess than professionals predicted, according to the latest survey by the Association of Chartered Certified Accountants (ACCA).

No doubt most accountants expected the results of ACCA's fourth annual survey on the self assessment procedure to be fairly poor - but the findings make worrying reading. Unsurprisingly the Inland Revenue (IR) came in for some serious criticism.

More than 95% of respondents said that they experienced difficulties with their clients tax forms. Among this figure 70% said they had to spend extra time on them because of errors made by the Inland Revenue. Nearly 60% of accountants had problems because IR computers had crashed, 51% received incorrect payment demands, and around half said that the IR had lost forms and correspondence.

Chas Roy-Chowdhury is the head of taxation at ACCA. He says: 'The problems with the system are almost as great today as they were last year when problems hit their peak.'

He continues: 'A number of things need to be addressed by the Revenue. This includes the problem that they are severely over-stretched in terms of workload. At present they don't have the adequate resources to remedy all the problems that emerged from our survey.'

Speaking in response to the ACCA's survey, a spokesman from the Inland Revenue says: 'With the introduction of a new self assessment system there are bound to be some errors. The survey did conclude that overall there had been some improvement in the last year - but we recognise that there is always room for further improvement. The system is under constant review.'

Another failure of the IR last year was its attempt to get people to submit their self assessment forms online. As an added incentive people were offered a £10 discount if they submitted via this route, but as Roy-Chowdhury at the ACCA points out due to software problems the whole thing was a bit of a disaster.

People were able to send their forms online after 3 July 2000, but as of 21 March 2001 only 39,251 forms had been received through this channel.

The Revenue has not confirmed yet whether the £10 incentive will still stand for online submissions next tax year, but it is expecting the response to be slightly better: 'As more people become aware of this method then we expect the numbers to improve,' says a spokesman.

Roy-Chowdhury from ACCA says there are things people can do to make self assessment less hassle.

He has this advice: 'Start thinking about getting your tax information together now - the sooner the better. Submit your details early or start planning which accountant you will use. Don't leave things till the last minute when there is less time to iron out any errors or problems.'

This year's survey is larger than previous ones with 550 tax practitioners throughout the UK taking part. Each practitioner has, on average, 300 clients - so the survey covers around 165,000 tax-payers required to fill out self assessment forms.

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